China strengthening gambling measures to combat online betting

China is in the process of beefing up its efforts to tackle online gambling, which includes creating an online blacklist and increasing scrutiny of monetary transactions.

Chinese Ministry of Public Security held a meeting last week on combatting ‘cross border gambling’ . During the meet, Minister Zhao Kezhi called on officials to investigate “a number of major cases” of online gambling operators, who are running the show from other countries and serving Chinese customers, in order to “completely destroy a group of criminal organisations.”

The minister said that it was “necessary to establish a ‘blacklist’ system for participating in gambling and employees and overseas tourist destinations.” The ministry is also looking to “strengthen the ‘fund chain’ and ‘technical chain’ governance measures and resolutely cut off the channels for the circulation of gambling funds.”

On Monday, China UnionPay, a major Chinese online payment platform, followed up on Zhao’s call and announced that some of its allies were failing to “take effective measures to curb illegal elements from engaging in illegal trading activities.” While UnionPay’s statement also spoke about sketchy loan arrangers and other “illegal public merchants,” it reminded its partners that they are not allowed to do business with online gambling and online lottery platforms.

China UnionPay also warned its partners to “standardise the display of transaction information, accurately reflect the names of real merchants and acquirers,” while reminding of “legal measures” for unauthorised use of the UnionPay brand.

These kinds of pronouncements are often made by Chinese officials, such as the ‘Gambling Prohibition Publicity Month’ announced in the month of January. That effort has been reported to result in 22 major gambling interruptions, of which 13 involved online betting sites.

It is possible that the Ministry may have felt pressured to issue its latest anti-online statement due to the ongoing coronavirus crisis. The government had suspended all lottery operations in the middle of January to prevent citizens from gathering in retail outlets, imposed severe travel restrictions to Macau casinos and even arrested individuals who defied orders to not to congregate in private mahjong games.

In the process of doing so, the Chinese government had ended up depriving its citizens of their only legally accessible gambling opportunities. As a consequence, the government may have noticed a recent surge in local residents’ efforts to access internationally licensed online gambling operators. Hedge fund manager Jason Ader recently claimed that China’s daily online betting statistics had risen 90% year-on-year during the Lunar New Year holiday period.